Uncertainties remain high over US monetary policy path: BOK

The Federal Reserve’s decision to cut interest rates was in line with market expectations, but uncertainty surrounding the future trajectory of U.S. monetary policy remains high, the Bank of Korea (BOK) said Thursday.

On Wednesday (U.S. time), the Fed cut the benchmark lending rate by a quarter percentage point, but Fed Chair Jerome Powell said a further reduction at the December meeting “is not a foregone conclusion.”

“The decision was in line with market expectations, but uncertainties remain high over its future course given the differing views within the Fed and Chair Jerome Powell’s cautious stance,” said BOK Deputy Gov. Park Jong-woo while presiding over a market situation meeting.

“The conclusion of the tariff negotiations between Korea and the U.S. is expected to have a positive impact on domestic financial and foreign exchange markets by easing uncertainty. But external risks remain, including uncertainties surrounding U.S.-China trade talks and concerns over fiscal soundness in major economies,” Park said, vowing to closely monitor market conditions.

After rounds of tough negotiations following a package deal reached in July, Seoul and Washington finalized the details of Korea’s $350 billion investment pledge during a summit between President Lee Jae Myung and U.S. President Donald Trump held in the southeastern city of Gyeongju on Wednesday.

Under the agreement, Korea will invest $200 billion in cash in the U.S., with annual investments capped at $20 billion, while the remaining $150 billion will be allocated to bilateral shipbuilding cooperation projects.